New stadium for San Antonio's Spurs

CBS.MarketWatch.com

SAN ANTONIO (CBS.MW) -- It's become almost routine: Professional sports franchise seeks an arena, lobbies public to pay for it, and public, fearing the team's flight, approves a new, bond-financed facility.

That happened Tuesday when 61 percent of voters in San Antonio approved a new home for the National Basketball Association's Spurs.

However, taxpayers in Houston, who are now paying for a publicly funded baseball stadium and will soon pay for a bond-financed football stadium, apparently have had enough and rejected plans Tuesday for a new arena for the NBA's Rockets, with 54 percent of the vote opposing the plan.

The Spurs, the 1999 NBA champion, and Bexar County came to terms on a new arena last month. Under the deal, the Spurs agreed to stay in town for at least 25 years, contributed $28.5 million up front and bear the cost risks of building the facility and of operations. In addition, the Spurs, who will share the new venue with the San Antonio Livestock Exposition, will pay $1.3 million in annual rent.

Bexar County, where San Antonio is located, will issue up to $146.5 million of revenue bonds. The county will receive 20 percent of net operating income above $4.75 million in any year and 20 percent of naming-rights revenue -- money paid by corporate entities to slap their names on sports arenas, as UAL
UAL, -3.32%
did in the case of Chicago's United Center and office-supply retailer Staples
SPLS, -0.20%
did in the case of the new Staples Center in Los Angeles -- in excess of $1.875 million a year.

Under Houston's deal with the Rockets -- now null and void -- the team agreed to split the cost of a $160 million arena. The Rockets, which won the NBA title in 1994 and 1995, could leave Houston for another city, although the team has a lease until 2003 at the Compaq Center
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